U.S. Department of Transportation
Federal Transit Administration
NEW STARTS AND
SMALL STARTS
Notice of Proposed Rulemaking
February 2012
1
New and Small Starts Program
• Successful 30-year program of investing in
transit infrastructure around the country
• Generates projects that are transformational,
create economic opportunity, and improve our
quality of life
• In the past year alone under the Obama
Administration, there has been a record number
of projects approved for construction
• But FTA believes we can still do better
2
Reasons for Undertaking
Regulation Change
• Better Address Obama Administration Goals:
–
–
–
–
Invest in infrastructure
Foster economic development and job creation
Improve sustainability and livability
Ensure consideration of the environment,
disadvantaged populations, and the impact these
projects have on economic development
– Streamline project delivery
• Inform reauthorization discussion
• Better quantify benefits of transit projects
3
The ANPRM Process
• To ensure we captured a broad range of ideas on how to
improve the process, FTA:
– Published an Advanced Notice of Proposed
Rulemaking (ANPRM) on June 3, 2010
– Conducted extensive outreach to non-traditional
partners
– Worked closely with our partners and HUD and EPA
• As a result, FTA received more than 1,000 pages of
comments on the ANPRM from a wide audience
4
The NPRM
• FTA believes the proposals included in the NPRM will:
– Reduce red tape and allow projects to reach the
construction stage sooner
– Potentially shave six months or more off the time
required to move major projects through the process
– Eliminate time-consuming technical requirements
• These are common-sense changes that:
– Continue an appropriate level of scrutiny for these
significant investments of taxpayer dollars
– Increase the transparency of the process
5
Agenda
• Ground Rules for the Session
• Overview of NPRM
• Current Process and Legislative Framework
• Streamlining Proposals in NPRM
• Criteria and Measures Proposed in NPRM
• Wrap Up
6
Ground Rules for this Session
7
NPRM Information Session
Ground Rules
• This is not a public hearing
• The purpose of this session is to provide an
overview of the NPRM and respond to questions
• Comments on the NPRM must be submitted in
writing to the Docket by the closing date of the
comment period: March 26, 2012
8
NPRM
• Published January 25, 2012 in the Federal
Register: Volume 77, Pages 3848-3909
• 60 day public comment period
• Submit written comments to the Docket
by Mail, Fax, Hand Delivery, or On-Line at
regulations.gov
9
NPRM
• Structured within existing statutory
framework of the program
– Eligibility requirements
– Steps in the project development process
– Evaluation and rating criteria, timeframes,
and 5-point rating scale
• If reauthorization occurs before
completion of final rule, FTA will need to
re-examine next steps
10
Overview
11
NPRM
• Summarizes and responds to comments
received on ANPRM
• Proposes regulatory text that outlines the
evaluation criteria and parameters of the
program
• Includes an appendix that provides more
detail on specific measures and weights
12
Proposed Policy Guidance
• Published concurrently with NPRM
• Provides more details and specifics on the
measures and weights
• Comments received on policy guidance will
be considered in conjunction with those
provided on the NPRM
• Can be found on FTA website at
http://fta.dot.gov/grants/12304.html
13
Benefits of This Structure
• Consistent with direction in SAFETEA-LU:
“Secretary shall publish policy guidance regarding the
capital project review and evaluation process and
criteria . . .each time significant changes are made,
but not less frequently than once every two years”
• Provides certainty on the criteria by including
them in the regulation
• Allows FTA flexibility to incorporate latest
research on technical methods by including
details on the measures and procedures in the
appendix and policy guidance
14
Issues with Current Process
• Misses Important Administration Priorities
– Perceived bias against projects designed to address
economic development and projects serving shorter,
inner-city trips
• Overly Complex Measures
– False precision and unnecessarily burdensome
• Incomplete Measure of Project Benefits
– No measurement of environmental benefits or
economic development effects
• Lacks Transparency
– Use of incremental measures and point of
comparison used are hard to explain and difficult to
understand
15
Goals for NPRM
• Capture a wider range of transit benefits
• Develop clear, understandable measures to
support streamlining
• Maintain data driven approach with quantitative
measures wherever possible
• Utilize simplified analytical methods
• Retain ability to identify investment-worthy
projects
Streamlining Ideas in the NPRM
• Expand ability for projects to pre-qualify
• Simplify data development
– Use trips on the project rather than travel time savings
– Allow use of FTA developed direct demand model to
estimate trips
– Eliminate baseline alternative
– Use simplified methods and standard factors to
estimate benefits
• Give sponsors flexibility and options about the level of
analysis they wish to undertake for some measures
• Allow use of current year data to satisfy requirements,
future year projections only at sponsor’s option
17
Grandfathering of Projects
• This new proposed rule would not apply to
– New Starts and Small Starts projects that
have already received a grant for construction
– New Starts already approved for entry into
Preliminary Engineering or Final Design
– Small Starts already approved for entry into
Project Development
18
Legislative Framework
19
Eligibility Requirements
Eligible Projects
• New Starts
– New Starts funding is >$75M and/or total project cost
≥ $250M
– fixed guideway or extension to existing fixed
guideway system
• Small Starts
– Total project cost <$250 million and Small Starts
share <$75 million
– fixed guideway, extension to existing fixed guideway
system, or corridor based bus system
Eligible Project Sponsors
• Public bodies and agencies
20
Required Steps in the
New Starts Process
FTA rating and decision points
Alternatives
Analysis
Determine
Locally
Preferred
Alternative and
adopt it into
constrained
long range
transportation
plan
Preliminary
Engineering
Final
Design
Full
Funding
Grant
Agreement
Required Steps in the
Small Starts Process
FTA rating and decision points
Alternatives
Analysis
Determine
Locally
Preferred
Alternative and
adopt it into
constrained
long range
transportation
plan
Project
Development
Project
Construction
Grant
Agreement
22
Requirements for FTA
Evaluation and Rating
• FTA must evaluate and rate projects:
– Annually in a Report to Congress (due First Monday in
February)
– New Starts
• For entry into Preliminary Engineering
• For entry into Final Design
• Prior to Full Funding Grant Agreement (FFGA) and
construction
– Small Starts
• For entry into Project Development
• Prior to Project Construction Grant Agreement (PCGA)
and construction
23
Requirements for FFGA/PCGA
• To receive an FFGA/PCGA
– At least “medium” overall project rating required
– No outstanding issues remain
• Contents of FFGA/PCGA
– Formal agreement on project scope, budget, and
schedule signed by FTA and project sponsor
– Establishes terms and conditions of Federal participation
– Caps Federal Section 5309 New/Small Starts funds
– New/Small Starts funds subject to annual congressional
appropriation
• By law FFGA/PCGA cannot be signed until after a
60 day congressional review
24
“Exempt” Projects
• TEA-21 allowed projects seeking less than
$25 million in New Starts funds to be
exempt from evaluation and rating by FTA
• SAFETEA-LU eliminated the exempt
project category upon publication of final
rule implementing Small Starts
25
Requirements for
Before and After Study
• Project sponsor must conduct a study
that:
– analyzes the impacts of the project on transit services
and ridership
– Evaluates predicted and actual outcomes
– Identifies differences between predicted and actual
outcomes
• Study plan must be developed and
included in the FFGA
• Actual outcomes should be based on two
years after opening of the project
26
Statutory New Starts Project
Evaluation and Rating Framework
Summary Rating
Project Justification
Rating
Financial Rating
Other
Factors
Economic
Development
Mobility
Improvements
Environmental
Benefits
Operating
Cost
Efficiencies Effectiveness
Land
Use
Non-New
Starts Share
Capital
Finances
Operating
Finances
Statutory Small Starts Project
Evaluation and Rating Framework
Summary Rating
Project Justification
Rating
Financial Rating
Other
Factors
Economic
Development
Cost
Effectiveness
Land
Use
Non-New
Starts Share
Capital
Finances
Operating
Finances
Development of Ratings
Law requires that FTA:
• Develop an overall project rating based on
ratings for project justification and local financial
commitment
• Provide individual ratings for each of the criteria
specified in law
• Rate projects on a 5 point scale
• Give each of the project justification criteria
“comparable, but not necessarily equal
numerical weight”
29
Summary Ratings
Summary Rating
Project Justification
Rating (50%)
Local Financial
Commitment Rating
(50%)
Current FTA Decision Rules:
– Must have at least “Medium” on both to receive
“Medium” overall
– If a project gets a “Low” rating on either, the
overall rating will be “Low”
30
Proposals in the NPRM
31
Project Justification Criteria
Current Weights
Proposed Weights
• Mobility = 20%
• Mobility = 16.66%
• Cost effectiveness = 20%
• Cost effectiveness = 16.66%
• Environmental Benefits = 10%
• Environmental Benefits = 16.66%
• Land Use = 20%
• Land Use = 16.66%
• Economic Development = 20%
• Economic Development = 16.66%
• Operating Efficiencies = 10%
• Operating Efficiencies = 16.66%
• Other Factors – can raise or
• Other Factors – can raise or lower
lower overall project
justification rating one level
overall project justification rating
one level
32
Pre-Qualification (Warrants)
Current FTA defined warrants
• Small Starts and Very Small Starts
– If O&M cost of the project is less than 5% of
current system-wide O&M, project qualifies for
automatic medium or better rating on local
financial commitment
• Very Small Starts
– If project meets FTA defined parameters for
cost and existing transit ridership in the
corridor, project qualifies for automatic
medium rating for project justification
33
Pre-Qualification (Warrants)
NPRM Proposed Expansion of Warrants
• Could cover larger projects and a wider
range of corridor types
• Projects could receive an automatic rating
of ‘‘medium’’ or better on one or more of
the project justification criteria
• Specific proposals would be identified in
future proposed policy guidance
34
Current Year/Horizon Year
•
Current Approach
New Starts
– Measures based on 20 year
time horizon
• Small Starts
– Measures based on
opening year of project
•
Proposed Approach
New and Small Starts
– Require forecast of costs/benefits
based on current year inputs
– At sponsor’s option, horizon year
measures may be calculated if
the sponsor feels it will help the
project rating
• Horizon is 10 years in the
future
– If sponsors chooses to do both,
rating is proposed to be based on
equal weighting of the two
35
Point of Comparison
Current Approach
• “Baseline” alternative –
best that can be done in
the corridor absent a
major capital investment
Proposed Approach
• If only current year
forecasts prepared,
existing system will serve
as point of comparison
• Typically a Transportation • If horizon year forecasts
System Management
Alternative (lower cost
bus option)
prepared, no build
alternative will serve as
point of comparison (can
include expansion
projects funded in the
TIP)
36
Breakpoints
• Will recognize small amounts of benefits are simply small,
but not bad
– Small positive benefits will be rated medium rather than low
– Only adverse impacts or disbenefits would receive mediumlow or low ratings
• FTA will look for research to help inform breakpoints
• If no research available, FTA will establish an initial set of
breakpoints based on the performance measures available
from projects currently in the pipeline of projects
• FTA seeking comment on how to establish breakpoints
• Breakpoints will be discussed in future proposed policy
guidance
37
Before and After Study
Current Regulation
• Project sponsor develops B&A study plan during
preliminary engineering, must be submitted to
FTA before final design
• Require collection of ‘‘before’’ data prior to start
of construction
• Requires collection of ‘‘after’’ data two years
after the project opens
• Study is an eligible expense under the FFGA
38
Before and After Study
Proposal in NPRM
• Keeps existing requirements but:
– Specifies in more detail the information to be collected
– Adds that before execution of FFGA, there must be
satisfactory progress on carrying out the study plan
– Seeks comments on whether 2 years after opening is a
sufficient time for project impacts to be fully realized
– Proposes that the final report be submitted to FTA
within 3 years of project opening
39
Pre-Award Authority
NPRM proposes to codify existing procedures
Point when automatic pre-award
authority is extended
Activity
Preliminary engineering
ROW acquisition
Utility relocation
Procurement of vehicles
Final Design
Non-construction activities
PE
Completion
of NEPA
FD






40
Reimbursement with Federal Funds
NPRM proposes to codify:
• PE and FD costs potentially reimbursable
once project approved into that phase
• Real estate potentially reimbursable once
a project is approved into final design
• Vehicles and construction reimbursable
only once a project is approved for
construction
41
Definitions Added
• Small Starts
• Project Development
• Corridor-Based Bus System
• Early Systems Work Agreement
• No-Build Alternative
• Metropolitan Transportation Plan
• Locally Preferred Alternative
42
No Changes Currently Proposed
• The following areas have no changes
proposed at this time:
– NEPA and New Starts interfaces
– Letter of No Prejudice policies/procedures
43
Proposed Criteria and Measures
44
Trips Rather Than Travel Time Saved
• Allows for use of simplified direct demand
model rather than traditional forecasting
methods
– FTA will develop the simplified model based
on ridership experience on systems around
the country
– Will use census data and transit network
information
– Sponsors can choose to continue to use
traditional methods if they prefer
45
Mobility Benefits –
Current Measure
• Based on:
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–
–
–
–
Number of Transit Trips
User Benefits per Passenger Mile
Number of Transit Dependents Using the Project
Transit Dependent User Benefits per Passenger Mile
Share of User Benefits Received by Transit
Dependents Compared to Share of Transit
Dependents in the Region
46
Mobility Benefits –
Proposed Measure
• Trips on the Project
– Each trip by a transit dependent person would
be equivalent to two trips by a non transit
dependent person
47
Environmental Benefits –
Current Measure
• Based on the EPA air quality designation
for the metropolitan area where the
project is located
– Projects in non-attainment areas for any
transportation-related pollutants receive a
“High” rating
– Projects that are in attainment areas receive a
“Medium” rating
48
Environmental Benefits –
Proposed Measure
• Based on estimated change in VMT resulting from
mode shift
• Monetized value of changes in
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–
–
–
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Energy use
Greenhouse gas emissions
Air quality criteria pollutants
Safety
Human Health (in the future when method is
determined)
• Compared to annualized capital and operating cost
49
Environmental Benefits –
Proposed Measure (continued)
• Measures would be converted from VMT into their
native units (e.g., tons of emissions or total
accidents) using national-level standard
conversion factors
• Native units would be monetized based on
standard dollar values
• Monetized values would be summed and
compared to the annualized capital and operating
cost of the proposed project
50
Environmental Benefits –
Proposed Measure (continued)
Change in Energy Use
– Changes in VMT would be multiplied by standard
energy factors to calculate changes in energy use
– FTA would consider the type of transit vehicles and
fuels used
– Would be standardized in British thermal units
– Monetized value will be factored down to avoid
double counting of benefits of reduced energy use
already considered based on the change in pollutant
and greenhouse gas emissions
51
Environmental Benefits –
Proposed Measure (continued)
Change in Air Quality Criteria Pollutants
• VMT would be multiplied by standard national emission
factors for CO, NOx, PM2.5, PM10 to generate estimated
tons of emissions
• The health consequences varies by criteria pollutant. FTA
would normalize each of these pollutants by multiplying
them by a health risk factor to create a generic “ton of air
emissions”
• When monetizing, a ton of emissions reduced in a non-
attainment area for a given pollutant would be worth more
than a ton of emissions reduced in an attainment area
52
Environmental Benefits –
Proposed Measure (continued)
Change in Greenhouse Gas Emissions
• Change in VMT would be multiplied by standard emissions
factors based on national average values from EPA
emissions models
• Greenhouse gas emissions would be normalized to CO2
• To monetize, FTA would use a cost estimate per ton of
CO2 emissions from the Technical Support Document:
Social Cost of Carbon for Regulatory Impact Analysis
Under Executive Order 12866. Interagency Working
Group on Social Cost of Carbon, United States
Government
53
Environmental Benefits –
Proposed Measure (continued)
Change in Safety
– Change in highway VMT would be multiplied
by standard safety factor based on data from
the Fatality Analysis Reporting System (FARS)
database produced by the National Highway
Traffic Safety Administration
– Change in transit VMT would be multiplied by
standard safety factor based on data from the
National Transit Database
54
Cost Effectiveness –
Current Measure
• Dollars per hour of “user benefits” =
annualized capital cost + annual O&M cost
user benefits
• Benefits and costs computed in relation to
a “Baseline Alternative”
55
Cost-Effectiveness –
Proposed Measure
• Annualized capital and operating cost per trip
– Cost could exclude certain betterments
• FTA would specify betterments and percentage cost
reduction allowed
• Discount rate used to annualize costs proposed to be
changed from 7% to 2%
– Trips would be the same measure used for
mobility (extra weight given to trips made by
transit dependent persons)
56
Operating Efficiencies –
Current Measure
• Comparison of system-wide operating cost
per passenger mile of the proposed
project compared to the baseline
alternative
57
Operating Efficiencies –
Proposed Measure
• Change in operating and maintenance (O&M) cost
per “place-mile”
– Place-miles would be the passenger capacity of a
vehicle multiplied by its annual revenue-miles of service
and summed over all vehicles in the transit system
• Passenger capacity would include both seated and
standing passengers
• Standing capacity would be computed with an FTA-
defined nationally consistent standing-density assumption
• Vehicle-miles would be required to be consistent with the
most recent report to the National Transit Database
58
Land Use – Existing Measure
• Looks at existing conditions in the corridor
– existing corridor and station area development
– existing corridor and station area development
character
– existing station area pedestrian facilities,
including access for persons with disabilities
– existing corridor and station area parking supply
59
Land Use – Proposed Measure
• Looks at existing conditions in the corridor
– existing corridor and station area development
– existing corridor and station area development
character
– existing station area pedestrian facilities,
including access for persons with disabilities
– existing corridor and station area parking supply
– existing publically supported housing in the
corridor and station areas
60
Economic Development –
Current Measure
• Likelihood economic development will
occur in the corridor
• Looks at
– Transit supportive plans and policies
– Demonstrated local performance of transit
supportive policies
61
Economic Development –
Proposed Measure
• Likelihood economic development will
occur in the corridor
• Looks at
– Transit supportive plans and policies
– Demonstrated local performance of transit
supportive policies
– Number of domestic jobs (reported but not
included in the rating)
• Optional quantitative scenario analysis can
be undertaken at sponsor’s option
62
Economic Development –
Proposed Measure (continued)
Optional quantitative scenario analysis
• Estimate additional changes in VMT expected to
result from economic development anticipated in
the corridor
• Estimate the environmental benefits that would
result
• Monetize the environmental benefits and
compare them to the annualized capital and
operating costs
63
Other Factors –
Current Approach
• Specific measures or calculations not proposed
• Salient factors can vary by project. Examples
might include:
– Environmental justice considerations and equity
issues;
– Opportunities for increased access to employment for
low-income persons, and welfare to work initiatives;
– Reliability of the data supporting the evaluation
criteria
– Any other factor which the project sponsor believes
articulates the benefits of the proposed project
64
Other Factors –
Proposed Approach
• Specific measures or calculations not proposed
• Other factors could include, but are not limited to:
– Multimodal connectivity of the proposed project;
– Environmental justice considerations and equity issues;
– Livable Communities initiatives and local economic activities;
– Policies in place to locate federal, and other major public, facilities
and investments in proximity to the proposed project;
– Whether a project is consistent with regional sustainability or
blueprint plans;
– Consideration of innovative procurement, and construction
techniques, including design-build turnkey applications; and
– Additional factors relevant to local and national priorities and to
the success of the project
65
Local Financial Commitment –
Current Approach
Subfactors examined include:
– Current capital and
operating financing
condition
– Commitment of capital
and operating funds
– Cost estimates/planning
assumptions/capacity
Local Financial
Commitment Rating
Non-Section
5309 Share
(20%)
Capital
Finances
(50%)
Operating
Finances
(30%)
Decision Rules:
– Share can help but can’t
hurt the rating
– Must have medium on
both capital and
operating to get medium
overall
66
Local Financial Commitment –
Proposed Approach
Local Financial
Commitment Rating
Current Condition
(both Capital
and Operating)
25%
Commitment of Funds
(both Capital
and Operating)
25%
Reasonableness of
Assumptions
and Financial Capacity
(both Capital and Operating)
50%
To encourage overmatch, projects proposing less than
50% share will have their local financing commitment
rating raised one level
67
Wrap Up
68
How to Comment
• www.regulations.gov
• Fax 202-493-2251
• By Mail to USDOT HQ
• Hand Deliver to USDOT HQ
• Cite Docket FTA-2010-0009
69
Suggestions for Commenters
• Organize comments by Subject or by
Section Number of the Proposed Rule
• Support comments with Data, Source
Material, and Specific Rationale
• Note: All comments will be included in
FTA’s Administrative Record for the Final
Rule (49 CFR Part 611)
70
Next Steps
• Receive and Review Comments
• Develop Final Rule
• Executive Branch Review
• Promulgation of Final Rule, with effective date
some point in the future to allow for:
– Publication of additional Proposed Policy Guidance
– Public Comment Period on that guidance
– Publication of final policy guidance